Correlation Between AIM ETF and RPAR Risk
Can any of the company-specific risk be diversified away by investing in both AIM ETF and RPAR Risk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining AIM ETF and RPAR Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIM ETF Products and RPAR Risk Parity, you can compare the effects of market volatilities on AIM ETF and RPAR Risk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in AIM ETF with a short position of RPAR Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIM ETF and RPAR Risk.
Diversification Opportunities for AIM ETF and RPAR Risk
Very good diversification
The 3 months correlation between AIM and RPAR is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding AIM ETF Products and RPAR Risk Parity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPAR Risk Parity and AIM ETF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on AIM ETF Products are associated (or correlated) with RPAR Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPAR Risk Parity has no effect on the direction of AIM ETF i.e., AIM ETF and RPAR Risk go up and down completely randomly.
Pair Corralation between AIM ETF and RPAR Risk
Given the investment horizon of 90 days AIM ETF Products is expected to generate 0.22 times more return on investment than RPAR Risk. However, AIM ETF Products is 4.44 times less risky than RPAR Risk. It trades about 0.49 of its potential returns per unit of risk. RPAR Risk Parity is currently generating about 0.05 per unit of risk. If you would invest 2,638 in AIM ETF Products on September 4, 2024 and sell it today you would earn a total of 48.00 from holding AIM ETF Products or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIM ETF Products vs. RPAR Risk Parity
Performance |
| Timeline |
| AIM ETF Products |
| RPAR Risk Parity |
AIM ETF and RPAR Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIM ETF and RPAR Risk
The main advantage of trading using opposite AIM ETF and RPAR Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIM ETF position performs unexpectedly, RPAR Risk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in RPAR Risk will offset losses from the drop in RPAR Risk's long position.The idea behind AIM ETF Products and RPAR Risk Parity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| RPAR Risk vs. iShares ESG Aware | RPAR Risk vs. iShares ESG Aware | RPAR Risk vs. iShares ESG Aggregate | RPAR Risk vs. iShares ESG Advanced |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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